How customer-centric retailers ask deeper questions — and get better answers

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How customer-centric retailers ask deeper questions — and get better answers
How customer-centric retailers ask deeper questions — and get better answers

The ongoing revolution in customer-focused analytics has sparked a shift in the retail landscape. Faced with increasing competitive pressures, forward-looking organizations are moving from the days of traditional market-driven strategies to a new era of data-driven customer-centric retailing.

For retailers today, gathering transactional data is the first step in conducting such analysis. As long as you have a loyalty program or a mechanism for identifying your customers, you have a wealth of individual data in your systems. The difficulty lies in drawing meaningful conclusions from the data. Using sophisticated segmentation modeling, overlays of publicly available data, and in-depth market research, you can gain an unprecedented degree of insight into who your customers are, what's important to them, why they choose to buy — or not buy — from you.

As retailers see the valuable insights that can be derived from their data, they start asking bigger questions: Who are my most valuable customers? In what categories am I gaining or losing share? What explains those changes?

We're not just looking at what shoppers do, but why they're doing it. And, with that evolution from what to why, the scope quickly expands beyond marketing programs and tactics to take in all aspects of a retailer's business. Customer-centricity is a strategy for the entire enterprise.

In this shift from product-centric to customer-centric retailing, you can find the existing customers representing the greatest source of potential revenue and why are they making the choices they're making.

From there it's a natural progression to leveraging the customer perspective to drive all strategic decisions — and to set measures of success — across the organization.  Your strategies become so specific to your customers that you gain the further advantage of being somewhat insulated from competitive pressures.

The resolve to embrace customer-centricity must come from the top. There must be commitment from senior management and a shared vision of how this new approach to retail will translate into competitive advantage and increased profitability. The compelling case studies from customer-centric retailers will quickly build support in the boardroom. But what really wins over front line management is demonstrating how you can paint highly detailed pictures of individual consumers by tracking how they shop. When marketing and merchandising budgets are lean, this level of insight is invaluable, allowing you to invest in strategies that accurately reflect customers' true worth today and their value down the road.

In asking why people shop the way they shop, you realign your value proposition around a subset of core customers who have the potential to deliver the greatest return to the enterprise. You identify your best prospects, determine what motivates them, and deliver against that.  Your achievable goal becomes inspiring those customers to ask a why question of their own: “Why would we ever shop anywhere else?”

Brian Ross is the general manager of Precima Inc. Reach him at


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